HSBC has settled $250 billion worth of forex trades using blockchain in the last year, it said on Monday, suggesting the heavily hyped technology is gaining traction in a sector until now hesitant to embrace it.
The bank has settled over three million forex trades and made over 150,000 payments since February using blockchain, it said in a statement. HSBC would not give data on forex trades settled by traditional processes, saying only that those settled by blockchain represented a “small” proportion.
Still, the data marks a significant milestone in the use of blockchain by mainstream finance, which has until now been reluctant to start using the technology at any scale.
Blockchain is a shared database that can process and settle transactions in minutes. Originally conceived to underpin the cryptocurrency bitcoin, the technology does not require third-parties for checks and its entries cannot be changed, making it highly secure.
Banks and other financial firms have invested hundreds of millions of dollars in the technology, hoping it will simplify and slash costs in processes from settlements to payments.
But few banks moved from testing to implementation of blockchain in large-scale projects. Many are worried about high costs, uncertainty over regulation and the risk of disruption to existing systems.
HSBC said its blockchain technology has automated manual processes and reduced its reliance on external technology.
Blockchain has also lowered the risks of errors and delays, cut costs, and helped the bank to better optimize its balance sheet, it said.
Richard Bibbey, the bank’s acting head of forex and commodities, said in a statement the bank was looking at how the technology could help multinational clients better manage forex flows.